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Key Points – March Report
Liquidity across China’s interbank market tightened modestly in March but conditions remained ample, with the People’s Bank of China (PBOC) taking measures to ensure liquidity in the money markets, to support the economic recovery and insulate the financial sector from turmoil after the SVB collapse , the latest MNI liquidity survey shows.
The MNI Liquidity Condition Index climbed to 37.5 in March, up from 35.7 in February, with 47.2% of the traders reporting looser liquidity than last month while another 22.2% of the traders saw some tightening.
- The MNI Economy Condition Index was 75.0, down from 78.6, with 63.9% of the participants confident in the recovery while 13.9% of traders said they are worried the recovery lacks momentum.
- The PBOC Policy Bias Index was 38.9, down from 44.3, with 78% of local traders believing Beijing will maintain the current level of ample liquidity.
- The Guidance Clarity Index stood at 56.9, following the previous reading of 58.6, with 86.1% of the participants understanding well the PBOC’s policy intentions.
The MNI survey collected the opinions of 36 traders with financial institutions operating in China's interbank market, the country's main platform for trading fixed income and currency instruments, and the main funding source for financial institutions. Interviews were conducted March 13 – March 24.
